Police Training Costs: How Do Police Training Providers Set Their Prices?

Outsourced Police Training Companies Don’t Talk About What Goes Into Their Pricing and Police Training Costs Calculations

Not us. We’re here to open up and talk about police training costs, what it costs to run police training programmes and service police training needs. To talk about this, we’ll use the example of our new online product,?Operation Onboard.

Pricing for online products, compared to in-classroom training products is very different. In this article, we’ll go into detail about what it costs to create an online asynchronous police training product, and why we charge what we do.

Factor 1: Asynchronous Product or a Live Product? What This Means for Police Training Costs

Ok, so this is a great question and the first thing that impacts the cost of outsourcing police training. It also is really important to consider when developing your training specifications. It comes down to the difference between a one-off or ongoing cost. If you’re running a training programme, and it is fully asynchronous and online, then it’s a case of build-it-once-deploy-it-over-and-over. If you want a ‘live’ programme, with a facilitator live online or in the classroom, then that becomes a recurring cost which has to be factored in every single time you run the programme.

With Op Onboard – our ‘recruit keep warm programme’ – this is a fully online programme, so there are no live facilitators either in the classroom or online. This means that we have more flexibility on pricing and the ability to leverage the magical power of economies of scale.

Factor 2: ‘Commercial off the Shelf’ or ‘Bespoke’ Aka Intellectual Property Rights Treatment in Police Training Costs

Ok, so here’s another biggie – and relates to the difference between ‘owning’ and ‘using’ the product. Ther is a big thing in police training about bespoke products – which is down to the passion people have for police learning, their own forces and what they do – but variation builds in cost. It is a fact. If you want a new or special thing for your organisation, it is going to drive up costs. Consider the analogy of the supermarkets and the range of options – there is a reason that Waitrose carries several times more product variation than Aldi or Lidl. It’s because they operate at a higher profit margin because their customers expect and are able to pay for a wider range of bespoke features to their service offering. Lidl and Aldi don’t do that – you get a couple of options. Their operating model is designed to accommodate some variation, but not twenty types of shower gel. You get to pick between a few. It’s the same thing for police outsourced training, if you want to design the product, it comes with increased costs. If something that already exists meets the majority of your specification, then it is likely to be at a more accessible price point. The creator, and IPR owner, will have taken the development cost risk, and be using the sale of the product to you, to meet that development cost in the hope of creating future value for their business (i.e. selling more than it cost them to make, promote, sell, run and meeting tax and compliance obligations).

Ok, so COTS, bespoke and IPR – how does that work? Basically, all that means is if you are paying someone to develop something (like a training programme) at the end of the day, it is yours to keep. They were just your vehicle. Their work product is owned by you.

If you buy a COTS product – you are buying the use of that product – usually, through user licensing – you’re not buying the rights to the whole product. You will be buying the right to however many users per month or year you think you need. The Intellectual Property Rights remain with the Creator.

Factor 3: The Cost of Doing Business

So when I was a police officer (this is Ellie writing by the way!), I had never worked in a business besides a neighbour’s potato farm, a village shop, cleaning the loos in a mountain hotel or pulling pints by the Thames – in other words, I had literally no idea how much it costs to run a business.

When I left policing in approximately 2016, I went to work for a legal tech company that was growing rapidly – still, I didn’t have that much idea about what it costs to run a business. I wasn’t on the board and I didn’t have access to the company’s accounting system. Now, that’s on me at Enlighten, and like all providers in the police learning space, it costs money to run a business and to be able to provide services. As a police officer, very often lives will depend on how you handle situations and the decisions you make. As someone running a small business, the responsibility is for people’s livelihoods.

The costs of doing business break down into indirect and direct costs; some fixed and some which are called COGS (Cost of Goods Sold). The first is unrelated to how many forces buy our products or services, the second is tied to the delivery of specific services.

Fixed Costs

Ok, so these are the fixed direct costs of the programme – for Op Onboard this would include the fees paid to the professional narrator, the SMEs and for the various software tools we used to create the programme, as well as licensing for image use. These increase in proportion to the amount ‘used’ – i.e. professional narrators charge based on volume, so the more you ask them to narrate, the more you pay. However, we only pay that once, for an async online product like Op Onboard, we don’t have to pay the narrator for every person taking the course. That is a fixed, one-off cost, directly related to the development of the product.

Indirect Costs

Right, so these indirect costs relate to the cost, in general, of running a business. This includes staff salaries, national insurance contributions, pension contributions, financial compliance activities like having an accountant that submits the accounts to Companies House, paying for and undertaking external accreditations to demonstrate the safety and security of what you do, like Cyber Essentials. This also includes things like office costs (whether fixed, on-demand or virtual), software licensing for all the necessary business tools to get work done, as well as hardware like computers. At Enlighten, our biggest cost centre is our staff. This is likely the case for most other similar businesses. And like the police service itself.

So, in relation to Op Onboard, it was Ellie (me!), who developed a lot of the content for Op Onboard, so an indirect cost of development would have been my salary, national insurance and pension costs while I was writing the product.

Costs of Goods Sold

Next up, and with a big impact on pricing is the ‘Cost of Goods Sold’. These are the costs that increase in direct proportion to the amount of an item, any item, sold. So in the police training world, the most obvious example of this is the number of trainers required to deliver training for the requisite number of sessions. For an asynchronous, online product, there is a Cost of Goods Sold – which takes the form of user licensing costs and delegate management and support costs. So, for every 100 people registered on the programme, we incur costs based on their access to the system (i.e. we pay for user licensing to a large software company for the ability to create, host and design online courses and have access to the features of their learning management system – and the more users we have, the more we pay).

Similarly, for delegate management, the more people we are welcoming onto a programme, the more ‘resource’ (aka lovely colleagues) time we need to dedicate to that activity to make sure they get a quality experience and their needs are met. To price for this, we make various assumptions about how much support each person might need – and this will vary a lot. Some participants may never wish to contact us directly, access the programme in a fully async way and complete the programme independently and others may need to have a greater level of responsiveness and support for our team – such as jumping on a call to troubleshoot, have more questions to ask or any other type of input they might need. In the learning provider world, this is called ‘delegate management and administration’. We love it as it brings us in touch with our learners and adds value – and the level of support offered needs to be priced in and discussed at the specification stage.

User or Organisation Based Licensing and Hosting & Why Economies of Scale Matter

This is a key point for pricing police training costs. Because user costs, which hosting by an outsourced organisation, usually incur a per-user cost, this increases in proportion to the number of users. However, if users are being onboarded at scale, the organisation can make use of automation, and benefit from economies of scale. For instance, sending a welcome series of messages to three people can take the same amount of time as sending a personalised message to three hundred people, with appropriate use of automation and data management. This means that with scale, the cost per learner can come down.

The hosting approach also impacts this and the potential for a product to be hosted (to live) within a force’s own Learning Management System. For instance, Op Onboard is a SCORM product – that means it ‘plays nicely’ with all SCORM compliant Learning Management Systems. It is how big providers create courses that that ‘go’ with all the big Learning Management Systems. Think of it as a railway gauge but for digital learning products! All the ‘trains’ need to be made to fit on the same tracks – that is what SCORM is.

What organisational based hosting means though, is that the element of delegate management all gets taken on by the purchasing organisation. The selling provider would ‘hand over the keys’ to a licensed product under contract and install it – with your learning tech people – into your Learning Management System. As the purchasing organisation, your license would last for the terms set out in the contract. These might be for 12 months for up to 3000 total learners – or any number specified in the terms of the licence.

Specifying organisational licence costs can be tricky and is normally more of a conversation between the procuring party and the supplier to come up with what would be considered a fair price by all concerned given the specific requirements of the purchasing organisation and their requirements for the next twelve months. This is closest to the ‘Enterprise Licensing’ options often displayed on software providers’ sites – the primary tool for the management of the purchase is the licensing agreement agreed by both parties. This differs from the ‘seller-hosted’ model when the seller retains control of learner registration and management.

Factor 4: The Value vs Cost Paradigm

Ah, now this is where things get a bit more discursive and interesting. This point is all about considering the value that something provides versus the cost of delivering it. This brings into consideration questions about what spending the money saves in the long run, sometimes called ‘non-cashable benefits’. For Operation Onboard, we think there are several good examples of the value that the programme can provide which are unrelated to the cost of developing it. Key topics for this include retention, standards, and operational effectiveness.

To go into more detail, consider you have a promising recruit who did well in the selection process and is waiting for their start date. They are being approached by other sectors on LinkedIn and referred by their friends for roles that might not fulfil their passion to become a police officer, but they might tick the box of nearer term needs such as being able to plan dates, getting a permanent position, and being able to support their family sooner, or go on holiday with friends after having missed out during Covid. They may also identify with a group who are underrepresented in policing and may have some concerns about joining. With Op Onboard, that person may feel that they are being ‘kept warm’ and becoming part of the service before they join, they may feel more committed to their career path and less likely to take a nearer-term option. They may make your police service more representative. They may turn out to be an exemplary officer. It is impossible to price for the future value a product may help produce, or the losses it may help prevent (i.e. the selection and HR processes if that person does not in fact take up their offer).

Similarly, in Op Onboard we believe it offers future value in two other important ways; conduct risk and operational effectiveness. We go strong, but kindly, on what it means to be a police officer in terms of on duty and off duty behaviour standards. Being really clear in a supportive way from the outset prevents the future cost of conduct risk. Dealing early on with issues about what the regulations mean for officers means it is not left to chance or interpretation. You can’t measure and we can’t prove whether taking part in Op Onboard will support conduct risk prevention – but all senior police decision-makers know that misconduct and underperformance are costly to address in many ways and that prevention is far better for organisations, communities and individuals.

Factor 5: The Picasso Factor

Hang on, what? Did you just liken yourselves to Picasso? (No, not really, of course not, we are pretty nifty at Canva though, and use it to design all our collateral…. another example of an indirect cost)

What we mean here is the cost of all the time to develop something or to learn the skills and insight you’re imparting in a digital product. This comes from the (possibly didn’t even happen) story of Picasso being spotted one evening in a Parisian cafe by a would-be art collector who had spotted him doodling on a napkin.

He doodled away for five minutes and then popped the napkin in his pocket before paying the waiter and getting up to leave. She saw her once-in-a-lifetime opportunity. She approached him and asked him for the napkin. Picasso said, of course, and named a sum of several thousand francs. Flabbergasted, she said, ‘but you only spent 5 minutes‘!! The (apocryphal) reply came as quick as a flash. ‘No, I didn’t. That sketch took me 67 years’.

For the avoidance of doubt, we are MOST DEFINITELY NOT (??) comparing ourselves to the grandmaster, we tell the story to make the point about understanding pricing in the design and creation of services.

For instance, as the lead content editor, Ellie (me!), wrote the content for Op Onboard in intense bursts over several weeks. In total, I probably spent approximately 10 working days writing the material – from ideation, through consultation, structuring with the team, drafting, editing, re-drafting, review and further editing post validation and mid-record.

But….. I was able to get it ‘down’ in a relatively short period because it is the culmination of her time spent within policing both as a new joiner and as a supervisor. The time she spent studying how to write effective content, doing a police leadership and management MSc at Warwick Business School, the time she spent researching the current challenges in delivering Operation Uplift. You can check out my policing credentials on?LinkedIn?– and while you’re there – do feel free to drop me a DM to let me know what you thought of this article, would love to hear from you!

Phrased differently, considering police training cost includes not just the ‘outputs’ but also some of the inputs required to create those outputs.

Phew, well – that was quite the download. I hope it was helpful to have a private provider open up about pricing and police training costs.

We’d love to chat about any of this with you. Shoot me (Ellie) a message on?LinkedIn,?Whatsapp Business?or email to [email protected]! You can also check out our revamped?Google Business?page here.